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This chapter looked at several ways managers achieve greater objectivity and rigor as they analyze their company's internal capabilities. Managers often start their internal analysis with questions like: "How well is the current strategy working? What is our current situation? Or what are our strengths and weaknesses?" The resource-based view provides a key, fundamental framework for analyzing firm success based on the firm's internal resources and competencies. This chapter described how insightful managers look at their business as a chain of activities that add value creating the products or services they sell-this is called value chain analysis. Managers who use value chain analysis to understand the value structure within their firm's activities and look at the value system, which also includes upstream suppliers and downstream partners and buyers, often gain very meaningful insights into their company's strategic resources, competencies, and options. SWOT analysis, a widely used approach to internal analysis, provides a logical way to apply the results of an RBV and a value chain analysis. Managers frequently use RBV, value chain, and SWOT analysis to introduce realism and greater objectivity into their internal analysis.









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